麦肯锡-可乐案例-日本
- 1. CONFIDENTIALThis report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion.Discussion documentDecember 2000Coke Case Study – Winning in Japan
- 2. FINGERPRINT – COKEHigh Low1
- 3. COKE IN JAPAN Capabilities Localizes physical assets; bottling and distribution managed through alliances; bottling alliances are typically inclusive 17 bottlers in Japan Creates direct distribution system to stores through bottlers Offers marketing, manufacturing, and investment support to partners, when needed Has supply alliances with McDonalds Spends huge resources on influencer relationships Partners with local agencies for marketing capabilities (e.g., Dentsu) Customer pull demand in product push Japan Uses segment marketing to understand customer behavior Organization Strong community feel to Coke Holds conventions for bottlers Distributes bottlers magazine Compensation is competitive – attracts graduates from top schools Almost 10% of Japan office is foreigners – some degree of tension with local staff; still has “ugly American” syndrome; senior Japanese experience glass ceiling Japan seen as strong progression path – CEO used to head Japan Product Adapts products to local markets Almost 10% of revenue comes from Japan-specific products Brands include Georgia Coffee, Sokenbicha, and Aquarius Bottlers guided Coke into developing localized products “Fast follower” strategy – quickly followed lead of smaller local players to enter tea and coffee drinks Coke maintains full control over product content Launches new types of products in Japan (e.g., canned soup drink)Middle Far EastEuropeNorth AmericaSales $ Billions1993199519971999Performance/backgroundLevers for successOtherMarket information Market is very competitive – more than 7,000 soft drinks are sold in Japan by 500 manufacturers Vending machines account for >50% of soft drink sales Company information Coke is the market leader in Japan Japan is a very profitable market for Coke (potentially the most profitable) Maintains >900,000 vending machines, 2x the number of competitors Products Coffee drinks, green tea, black tea, milk/yogurt drink Coke offers 5 brands with 60 flavors; 75% of brands are Japanese Competitors: Kirin, Ito En, Suntory CST DCS Eric Friberg*, Todd Guild*, Mark Loch, Hirokazu Yamanachi*14.018.018.919.833322114231533293429221525233814CAGR 9% * Has worked on Japan studies 2
- 4. CONTENTS Company overview Japan market entry strategy Products Capabilities Organization3
- 5. COKE – COMPANY BACKGROUND Founded 1886 in Atlanta, USA Number of global employees: 37, 400 CEO: Douglas N. Daft (Australian) Most senior manager for Japan: Mary Minic (President, Japan) Key products: carbonated and sports drinks, juices, tea, coffee Market cap: $151 billion (as of November 13, 2000) Key industry focus: beverages No. 1 soft drink company globally 50% global market share Owns two of top three global brands (No. 1 Coca-Cola classic, No. 3 Diet Coke) Market leader in soft drinks in Japan 56% market share; competes with 500 manufactures selling over 7,000 drinks Global competitors: PepsiCo, Cadbury Schweppes, Nestle Competitors in Japan: Kirin, Ito En, Suntory Owns 40% stake in Coca-Cola Enterprises (world’s largest bottler)4
- 6. COMPANY EVOLUTION Coke has been an international company since the start of the century, but WWII made it a true multinational. Coke entered the bottling business in the mid-eighties. Recently, the company has seen strong profits from financial reengineering in its bottling segment. 1800s Invented in 1886 in Atlanta, USA, as a headache, indigestion, and exhaustion remedy Major advertising started in 1892; by 1895 Coke was sold in every U.S. state 1900s-1920s Coke sells in Cuba, Jamaica, Bermuda, the Philippines, Puerto Rico, and Europe by 1916 First bottling franchise established in 1901 Repositions Coke as non-medicinal product Coke bottle invented in 1916 Devotes personnel to maintaining good relations with bottlers in 1922 Establishes pioneering market research agency 1930s-1960s Advertising targets minorities starting in 1950s World War II catapults Coke into world market, creating first U.S. multinational Fanta innovated by Coke in Germany, driven by ingredient constraints during WWII Opens 15-20 plants worldwide during 1950s Merges with Minute Maid in 1960 Merges with Duncan Foods in 1964 Acquires Belmont Springs Water Co. in 1969 Expands product line in response to PepsiCo competition in 1960s Fanta in U.S. in 1960 Sprite, Tab, Fresca introduced Diet versions introduced 1970s-1980s Acquires Aqua-Chem (desalting machines) in 1970 Acquires Taylor Wines and other wineries in 1977 Introduces Coke in Russia and China in 1970s Acquires Columbia Pictures in 1982 for $750 million Reformulates Coke in 1985; unfavorable customer reaction Divests entertainment business in 1987 Focuses on core, profitable business and doubles net income to $1 billion in 1988 Enters bottling business in mid 1980s1990s Launches “Always Coca-Cola” theme in 1993 CEO articulates priorities in 1993 creation of stock holder value, brand building long-term focus Top 16 markets account for 80% of volume; the markets comprise 20% of world population Bottling business plays important role in profitability Invention Repositioning and marketing Expansion, acquisitions, and diversification Diversification and rationalization Marketing Source: International Directory for Company Histories 5
- 7. Source: Annual report; Standard & Poor’s RegistarNameRoleJapan experienceDouglas N. DaftCEO and ChairmanSENIOR MANAGEMENTPresident and COOJames E. ChestnutEVP, Operations SupportCharles E. FrenetteGary P. FayardSVP and CFOJoseph R. GladdenEVP and General CounselCarl WareEVP, Head of Global Public Affairs and AdministrationSVP, Chief Marketing OfficerStephen C. JonesCoke has a diversified team of senior managers.Used to head JapanJack L. StahlEVP, President of Greater EuropeUsed to run marketing in Japan6
- 8. COKE STOCK PRICE COMPARISON – U.S. Coca-Cola Co. Beverages (non-alcoholic) S&P 500 Comp – Ltd.Coke dramatically outperformed the market as well as its competition, especially when it started divesting non-core businesses to focus on its profitable segment.Coca-Cola Co.Beverages index (non-alcoholic)S&P 500 index7
- 9. COKE SALES BY REGION $ Billions Coke has an estimated 56 percent market share in Japan and has been growing its Japanese contribution to total sales.199319951997199914.018.018.919.8OtherMiddle and Far EastEuropeNorth America CAGR = 9%142132332933231514222935382326138
- 10. Source: Company web-siteCOKE’S SALES BY BRAND In 1999, 63 percent of Coke’s total gallon sales came from products bearing “Coke” trademark.CokeOther9
- 11. Coke has historically made equity investments in selected bottlers with the intention of financial reengineering, but is now moving away from this strategy. The company has realized that “big is not always better” and is trying to get out of anchor bottlers in Brazil and the Philippines. Source: Annual reports; McKinsey analysisHIGHLIGHTS OF COKE’S BOTTLING BUSINESS Breakdown of worldwide unit case volume produced/distributedBottlers owned and controlled by CokeIndependently owned bottlersBottlers in who Coke has non-controlling ownershipPercentHistorically, Coke invested in undervalued bottlers worldwide, provided financial and managerial support, and improved operating efficiencies which generated increased sales; Coke benefited from growth, improved cash flows and increased owner value; at times, Coke sold these bottlers after turning them around, for sound profits10
- 12. SELECTED LOCATIONSCoke is headquartered in Atlanta, Georgia in the U.S., but has subsidiaries located over a wide geography.NOT EXHAUSTIVE11
- 13. CONTENTS Company overview Japan market entry strategy Products Capabilities Organization12
- 14. STORYLINE In order to enter and succeed in Japan, Coke realized that it needed to adopt a partnering strategy. Coke allied with 17 locally owned and managed bottlers and leveraged these relationships to set up a direct distribution channel as well as gain manufacturing and marketing capabilities It followed its bottlers’ advice and expanded its product offerings to include specialized beverages (e.g., milk-based drinks, coffee drinks, teas). In addition, Coke introduced new product categories (e.g., canned soups, Coo, a flavored juice product) and new flavors in existing brands (e.g., Fanta Golden Pineapple) to increase its market share in trend-oriented Japan The company was also innovative in its alliance strategy (e.g., supply alliance with McDonalds), its marketing techniques (e.g., introduced reclosable PET bottles), and its acquisitions (e.g., acquisition of Kanebo’s vending machine operations). Coke’s sales channel (930,000 vending machines, over twice as many as its nearest competitor) is a distinct competitive advantage in Japan where vending machines are the most popular sales channel Coke realized that it needed top talent to compete effectively in Japan and sent strong managers like Doug Daft (current CEO) and Stephen Jones (current Chief of Marketing), to Japan in leadership roles. Thus, Japan was seen as a progression path to top positions in the company Coke is currently the market leader in Japan’s soft drink segment with a 56% market share. Coke owns the number 1 local brand Georgia (coffee drink). However, the company has been a slow mover in exploiting new opportunities (e.g. water and sports drinks) In the future, Coke faces the challenge of expanding its low market share penetration (20%) in the Japan’s most rapidly growing segment of specialized beverages 13
- 15. CONTENTS Company overview Japan market entry strategy Products Capabilities Organization14
- 16. PRODUCT STRATEGY Coke understands the importance of offering products that appeal to the local market, in addition to its existing, classic products.15
- 17. COKE’S JAPANESE PRODUCTS Coke has consistently rolled-out new products tailored for the Japanese market. Source: Company website Georgia (coffee drink)Ambasa (non-carbonated lactic soft drink) Real Gold (carbonated herb mix flavored drink)Vegitabeta (fruity drink with multiple nutrients)Ko Cha Ka Den (blended tea – Royal Milk, Fine Aroma Straight, Garden Lemon)Saryusaisai (non-sugar Oolong tea)Saryusaisai Sokenbicha (special branded tea) Seiryusabo (Green and Barley teas)Shipla (“functional”, stress flavored drink with mulivitamins) Lactia (lactic, non-carbonated drink; promotes healthy digestion) Calo (“functional” soft drink; helps build healthy bones) Perfect Water (mineral water)16
- 18. CONTENTS Company overview Japan market entry strategy Products Capabilities Organization17
- 19. COKE CAPABILITIES IN JAPAN Coke leverages local alliances to gain capabilities. The company also offers marketing, manufacturing, and investment support to partners when needed. 18
- 20. Japan is Coke’s most profitable market after the U.S. Coke derives about 17-20% of its overall profit from Japan. Source: Wall Street Journal, January 14, 1999JapanROWPercentJAPAN CONTRIBUTION TO COKE’S PROFITS IN 199919
- 21. CONTENTSCompany overview Japan market entry strategy Products Capabilities Organization20
- 22. StructureDecision-rightsTalentCultureORGANIZATIONAL LEVERS Realignment of organization in January 2000 Increases focus on local business units Redefines roles and responsibilities Increased autonomy Transfer of responsibility from corporate to local business units Corporate only responsible for overall company policy and strategy Performance and results driven culture; aggressive approach to finance and marketing Compensation is competitive Japan is seen as strong progression path and top talent is sent there CEO used to head Japan Chief of Marketing used to run marketing in Japan Lack rotation of top Japanese people Still has “ugly American” syndrome Senior Japanese feel out of place, experience glass ceiling and do not get high positions in Atlanta Strong community feel to Coke Holds conventions for bottlers Distributed bottlers magazine Some degree of tension with local staff Almost 10% of Japan office is foreigners Culture not “appropriate” but effectively translated Winners allowed to be aggressive21
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